Brown-Forman (BFB) investor relations material

Executive summary

• Fiscal 2026 net sales declined 1% year-over-year, but results exceeded organic expectations due to innovation and international momentum.

• Operating income decreased 10% and diluted EPS fell 17%, mainly due to non-cash impairment charges and the absence of prior year gains.

• Cash flows from operations increased by over $400 million to $1.0 billion, and free cash flow rose by $462 million to $893 million.

• $827 million was returned to shareholders via dividends and share repurchases.

• Terminated strategic discussions with Pernod Ricard and ended the Korbel relationship.

Financial highlights

• Net sales: $3,928 million, down 1% year-over-year; organic net sales flat after adjusting for portfolio changes and FX.

• Gross profit increased 2% to $2,378 million, with gross margin expanding 160 bps to 60.5%.

• Operating income: $1,001 million, down 10% year-over-year; organic operating income decreased 2%.

• Diluted EPS: $1.53, down 17% year-over-year.

• Free cash flow increased to $893 million from $431 million in the prior year.

Outlook and guidance

• Fiscal 2027 organic net sales expected to be approximately flat.

• Organic operating income forecasted to decline 3%-5% due to cost pressures.

• Capital expenditures projected at $60-$70 million, significantly lower than recent years.

• Effective tax rate expected at 20%-22%.

• Continued macroeconomic and geopolitical headwinds anticipated, especially in developed markets.